Income Tax Law makes a mandatory requirement for businesses and professionals to maintain books of accounts as per Section 44AA. To provide a relief to small taxpayers from this tedious job, the Income-tax Act has framed the presumptive taxation scheme under sections 44AD,  sections 44AE  and sections 44ADA. 

A person opting presumptive taxation scheme will get a relaxation from tedious job of maintenance of books of account and can declare income at a prescribed rate.  

 

There are three presumptive taxation schemes as given below:

 

1. Section 44AD: For Computing Profits & Gains of Business on Presumptive Basis. Such business can be owned by an individual (proprietorship), HUF or a traditional Partnership firm (excluding Limited Liability Partnerships).

2. Section 44AE: For Computing Profits and Gains of Business of Plying, Hiring or Leasing Goods Carriages:

3. Section 44ADA: For computing Profits and Gains of Profession on presumptive basis